Millennial who saved $1 million: Buying a new car is 'one of the worst financial decisions you can make in your life'

Buying a new car is a massive financial mistake, says self-made millionaire Grant Sabatier

Grant Sabatier, founder of Millennial Money and author of "Financial Freedom: A Proven Path to All the Money You Will Ever Need," knows how to maximize his savings. By the age of 30, he had earned over $1 million.

To get there, Sabatier, now 34, increased his income by negotiating his salary and working up to 13 side hustles at a time. He also focused on saving as much as he could by cutting back on his three biggest expenses: food, housing and transportation.

To get around, Sabatier recommends cost-saving measures like carpooling or using public transportation. But if it's necessary to own a car, "buy the nicest kind of used car that will get you from point A to point B," he tells CNBC Make It.

That's because, he says, buying a new car is "one of the worst financial decisions that you can make in your life."

Not only is a new car often quite expensive, but it's not an investment that will gain value over time.

"Realize that you're trading two things when you buy a new car," Sabatier says. "The first: You're trading all of your life that you spent making the money to buy it." And second, "you've lost the opportunity for that money to grow over time."

Buying a $40,000 car, for instance, he says, would require a year's worth of work if you're earning $20 per hour after taxes and working 200 hours annually. If you had invested that money instead, it would be worth more than $240,000 after 30 years with a 6 percent rate of return, or more than $440,000 with an 8 percent rate of return.

Financial experts Suze Orman and David Bach agree that buying a new car isn't worth it.

Orman recommends buying used cars because, unlike a home, a car won't increase in value. "The second you drive that car off the lot, it depreciates, 10 percent, 20 percent," she tells CNBC Make It. "Let somebody else get that depreciation."

Bach agrees: "Why would you borrow money to buy an asset that immediately goes down in value by 30 percent?"

Buying a new car is a mistake, according to these self-made millionaires

Bach also points out how much owning will cost in the long term. "If you're spending $500 a month for that car, well, that's $6,000 a year, not including the car insurance or the gas. That could be two months or three months of your income," he says.

"Run the numbers and then ask yourself: Do you really need a car that nice or could you buy a car that's less expensive — maybe a little older — but still looks good and still runs?"

At the end of the day, "it's up to you" whether or not you want to invest in a new car, Sabatier says. But if you decide put your money into a vehicle instead of another investment, "you've missed that growth opportunity."

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